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FIN41330

Academic Year 2024/2025

Empirical Corporate Finance (FIN41330)

Subject:
Finance
College:
Business
School:
Business
Level:
4 (Masters)
Credits:
7.5
Module Coordinator:
Professor Ronan Powell
Trimester:
Spring
Mode of Delivery:
On Campus
Internship Module:
No
How will I be graded?
Letter grades

Curricular information is subject to change.

This course aims to bridge the gap between theoretical financial models and the real world by reviewing the major accomplishments (and failures) of empirical finance during the last quarter of a century. More broadly, the course will provide an accessible introduction to empirical studies in corporate finance. Given the applied nature of the material, the course will focus on the empirical techniques used most often in the analysis of corporate finance problems and how they are applied using actual market-based and financial statement data.

FIN41330 is one of the core courses in the MSc in Finance programme. Material covered in Equity Asset Valuation (FIN40180), Capital Markets and Instruments (FIN42040), Financial Theory (FIN42000), and Financial Analysis (FIN42030) has direct relevance to this course. In particular, the course examines some of the theoretical material covered in these modules in a more applied empirical setting. The course will revisit topics on agency theory, market efficiency, capital structure, restructuring, and corporate control. Students should also find some of the econometric techniques covered in Financial Econometrics (FIN41660) useful in understanding the techniques used in empirical papers, and in undertaking the group project and lab work.

About this Module

Learning Outcomes:

On completing this module, you will be able to:
1. Evaluate, summarise, and discuss the research contributions and findings of top journal academic papers in empirical corporate finance.
2. Critique the seminal theories and understand different research design and econometric approaches used in empirical corporate finance.
3. Work in teams to manipulate large datasets, apply different research designs, and develop econometric models using a statistical package (e.g., Stata) to test key theories and hypotheses.
4. Demonstrate sound critical and analytical skills, discuss and write-up your own research findings in top journal academic paper format.

Indicative Module Content:

Content is subject to change, but the following key topics are typically covered?

1. Review of key theories and empirical evidence on agency theory
2. IPO background and theory
3. Takeovers around the world and information asymmetry
4. Governance and firm value
5. Predicting events and returns - IPO failure and takeovers
6. Venture capital and firm performance
7. Dynamic modeling applied to capital structure
8. Corporate cash holdings

Student Effort Hours:
Student Effort Type Hours
Lectures

24
Tutorial

6
Specified Learning Activities

60
Autonomous Student Learning

100
Total

190

Approaches to Teaching and Learning:
The teaching and learning approach adopted emphasises the importance of developing critical thinking skills and competency in applying empirical techniques. This is achieved through a mix of formal lectures, lab sessions, discussion groups, and group project work. An important part of the module is linking theoretical material with appropriate empirical tests. This is achieved by using several learning techniques, including, class room discussions based on journal papers drawn from recent empirical research, group projects and lab sessions. Students will be expected to participate actively in all classroom activities and will have the opportunity to discuss their own findings from group project work in-class and during computer labs.

Requirements, Exclusions and Recommendations

Not applicable to this module.


Module Requisites and Incompatibles
Not applicable to this module.
 

Assessment Strategy
Description Timing Component Scale Must Pass Component % of Final Grade In Module Component Repeat Offered
Exam (In-person): The mid-session test is 90-minutes and is closed book (weighting of 30%). Questions are longer-style essay and based on academic papers covered in class. Week 7 Graded No
30
 Yes
Exam (In-person): The final test is 90-minutes and is a closed book (weighting of 30%) test. Questions are longer-style and based on academic papers covered in class. Week 12 Graded No
30
 Yes
Group Work Assignment: You will be divided into groups and provided with a dataset relating to a specific topic(s) covered in the course. Each group will be asked to replicate the research design and methods of the paper. Week 2, Week 3, Week 4, Week 5, Week 6, Week 7, Week 8, Week 9 Graded No
40
 No

Carry forward of passed components
Yes
 

Remediation Type Remediation Timing
In-Module Resit Prior to relevant Programme Exam Board
Please see Student Jargon Buster for more information about remediation types and timing. 

Feedback Strategy/Strategies

• Feedback individually to students, on an activity or draft prior to summative assessment
• Feedback individually to students, post-assessment
• Group/class feedback, post-assessment
• Peer review activities

How will my Feedback be Delivered?

Students can inspect in-class exams post assessment. Post exam feedback is also provided in the lecture and a document uploaded to Brightspace so students can evaluate and improve future exam performance. Projects will be returned by email with a cover sheet showing how the group performed. The project will also be returned with tracked comments and changes.

Name Role
Ruoyu Gao Tutor

Timetabling information is displayed only for guidance purposes, relates to the current Academic Year only and is subject to change.
Spring Lecture Offering 1 Week(s) - 20, 21, 22, 23, 24, 25, 26, 29, 30, 31, 32, 33 Wed 13:00 - 14:50
Spring Lecture Offering 2 Week(s) - 20, 21, 22, 23, 24, 25, 26, 29, 30, 31, 32, 33 Wed 15:30 - 17:20
Spring Tutorial Offering 1 Week(s) - 21, 22, 23, 24, 25, 26 Wed 12:00 - 12:50
Spring Tutorial Offering 2 Week(s) - 21, 22, 23, 24, 25, 26 Wed 11:00 - 11:50
Spring Tutorial Offering 3 Week(s) - 21, 22, 23, 24, 25, 26 Wed 13:30 - 14:20
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